South Dakota Income Tax Calculator
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South Dakota Income Tax Calculator

It’s no secret that most Americans dread tax season — but you don’t have to. At Community Tax, we’ve made it simpler than ever to not only understand how taxes in South Dakota work, but how to calculate your tax bill. Use the income tax calculator below to figure out how much you owe (or how much you may be able to get back).

South Dakota Tax Calculator
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Not confident in your ability to accurately complete your South Dakota state taxes? One of our tax experts can do them for you so you can focus your energy on work, family, and all the other responsibilities that also demand your time. Leave it to us and you can rest assured that your taxes will be done right, and in a timely manner!

Overview of South Dakota State Taxes

In addition to your federal taxes, you’re responsible for taxes in South Dakota. Why do you have to pay taxes twice? In the simplest terms, federal taxes fund federal programs and state taxes fund state programs. While the federal government does allocate some of federal tax revenue to each state, it is not enough to cover all the expenses required to maintain all the important services provided to the public. So, states have the right to impose their own taxes, and they do.

State taxes vs. federal taxes

Fortunately for taxpayers, South Dakota state tax rates are fairly conservative for the most part. South Dakota is one of only seven states that does not have income taxes, a pretty big perk for those who live and work there.

However, that doesn’t necessarily mean that you’re going to have a small tax bill. You’ll still have to pay sales and property taxes to the state. In this guide, we’ll delve deeper into the specifics of South Dakota state taxes so you can feel confident when you complete your return this year.

South Dakota Taxes: Quick Facts
Income tax: 0%
Sales tax: 4.5%
Property tax: 1.28%
South Dakota State Tax Brackets

Since South Dakota is one of the few states (along with Florida, Texas, Washington, Nevada, Alaska, and Wyoming) that doesn’t impose income taxes, there aren’t any South Dakota tax brackets to worry about. This makes completing your South Dakota state income tax return much simpler than your federal return.

South Dakota Personal Income Tax

South Dakota doesn’t collect personal income taxes, meaning the South Dakota income tax rate is effectively zero. As a South Dakota taxpayer, that means that you’ll enjoy a major tax break when it comes time to file. But, don’t forget that you’re still responsible for paying your federal income taxes.

Our pros make filing income tax a breeze. Give us a call!
South Dakota Capital Gains Tax

South Dakota does not have a capital gains tax. This is because capital gains are often considered a part of income. For instance, if you made a profit off selling stock or real estate, that would be added to your income for the year. But, because there’s no personal income tax, you don’t need to worry about this often complex aspect of your state taxes.

The federal government does implement a capital gains tax depending on how long you held an asset before selling. Short-term assets (those held for less than a year) are taxed according to the federal income tax brackets. Long-term assets (those held for longer than a year) are taxed at either 0%, 15%, or 20%.

For help with your capital gains taxes, reach out to Community Tax to speak with a professional today!

South Dakota State Sales Tax

The statewide sales tax in South Dakota is 4.5%. However, each local jurisdiction has the right to apply additional sales taxes on the goods and services of of 1 - 2%. So, depending on where you live, you could be paying up to 6.5% sales tax.

You can find your specific sales tax rates with the convenient sales tax rate finder which uses your address.

While most goods and services are subject to sales and use taxes, there are some that are exempt, including:

  • Advertisements prepared and placed by an agency
  • Certain motor vehicle repairs and services
  • Health services
  • Social services
  • Stock and commodity broker services (licensed under title 47)
  • Travel agent services

Additionally, there is a sales tax refund available to certain South Dakotans.

Sales Tax Refund

If you’re a senior citizen or have a disability, you may be eligible for a sales tax refund. However, to qualify, you must meet these requirements:

  • You were a South Dakota resident for the entire tax year
  • You were over 65 or disabled on or before January 1st of the relevant tax year (and must have qualified to receive Social Security Disability benefits or Supplemental Security Disability benefits during some part of the tax year)
  • You live alone and your annual income is less than $12, 490 or your household combined income is less than $16,910

If you believe you’re eligible for the sales tax refund, you may be able to get back some of the money you paid toward sales taxes this year.

Note: To prove your age, you should include a copy of either your Medicare card, birth certificate, baptismal certificate, or driver’s license.

Our tax professionals can clarify anything else you need to know about sales taxes.

South Dakota Excise Taxes

Excise taxes are applied in addition to sales tax on certain goods or certains. Often, excise taxes are charged on items that may cause harm to the environment or affect public health, such as tobacco products and alcohol. As such, they’re often referred to as “sin taxes”. However, they can be charged on a variety of items that are popular but not considered necessities.

Here are some of the most common excise taxes South Dakota taxpayers will encounter:

Alcohol Excise Taxes

Alcohol excise taxes vary depending on the type of beverage. While beer is taxed at $0.27 per gallon, wine is $0.93 per gallon. Liquor is taxed at a much higher rate of $3.93 per gallon.

There’s also an additional Municipal Gross Receipts Tax (MGRT) of 1% that is imposed on alcoholic beverages.

Tobacco Excise Taxes

Many states have taken up excise taxes on tobacco products, including cigarettes. The cigarette excise tax in South Dakota is $1.53 per pack of 20, which is significantly lower than the majority of states (including neighboring Minnesota which charges an extra $3.77 per pack).

Fuel Excise Taxes

If you drive a lot, you may want to pay special attention to the fuel excise tax rates. The South Dakota tax rate is $0.28 per gallon for regular gasoline or diesel fuel. While it might seem like a small charge, this extra change can add up over the month. You’ll also have to pay $0.02 Tank Inspection Fee per gallon — making the effective rate $0.30 per gallon in excise taxes.

Motor Vehicle Excise Tax

A 4% excise tax is applied to the purchase of most motor vehicles.

Additionally, there is a 4.5% excise tax on rental vehicles that are rented for less than 28 days.

Tourism Excise Tax

Tourism activities like lodging and amusement services are subject to an excise tax of 1.5%. However, if you’re visiting Sioux Falls specifically, the lodging tax is only 1%.

Additionally, the 1% Municipal Gross Receipts Tax (MGRT) applies to eating establishments, lodging accommodations, and admissions to places of amusement, as well as athletic and cultural events.

911 Emergency Surcharge Excise Tax

Telecommunications customers are required to pay an excise tax of $1.25 per line each month, known as the 911 Emergency Surcharge.

Ag Excise Tax

If you sell or purchase farm machinery, you’ll have to pay a 4% Ag Excise Tax.

While you won’t see excise taxes listed out on your receipt like regular sales and use taxes, they’ll typically be included in the sticker price of the goods or services you’re purchasing.

South Dakota Insurance

As of 2019, South Dakota no longer imposes a penalty for not having health insurance.

Additionally, while taxpayers personally don’t owe insurance taxes for health insurance, employers and insurance companies are typically responsible for paying taxes on insurance premiums they collect from policyholders. Businesses are responsible for paying the tax, but they often pass it on to the consumer through higher insurance costs.

South Dakota State Property Tax

Being a homeowner in South Dakota means enjoying the perks of beautiful seasonal changes, a thriving career, access to great public services, and peace of mind when you’re away thanks to the low crime rates. And, you get it all at a lower cost of living than many other states in the nation. However, you also have to pay property taxes.

Since South Dakota doesn’t collect income taxes, it must pull in revenue through sales and property taxes. And, like sales taxes, property taxes are enforced by local jurisdictions at their own rates. So, depending on where you own property within the state, your property taxes can vary widely from other counties.

The median property tax rate in South Dakota is 1.28%, for a median property tax bill of $1,620. The highest property taxes in the state are paid by homeowners in Lincoln County which has an average property tax bill of $2,470. However, on the other end of the spectrum, residents of Mellette County only paid $510 in property taxes on average; they currently pay the lowest property taxes in South Dakota.

While your property tax bill might seem like a lot, even South Dakotans who are paying the highest property taxes will pay lower tax bills than the average American (especially those in states like Hawaii and California); an important fact that will help put your South Dakota taxes in perspective.

If there is an issue with the assessment value of your home, or you have other questions relating to your county’s property taxes, you should contact your county’s treasurer office.

South Dakota Property Tax Relief Programs

The state of South Dakota also provides several property tax relief programs for qualifying citizens.

Property Tax Refund

South Dakota offers a property tax refund for citizens who are seniors or have disabilities. You may qualify for the property tax refund if:

  1. You were a South Dakota resident for the entire tax year.
  2. You were over 65 or disabled on or before January 1st of the relevant tax year (and must have qualified to receive Social Security Disability benefits or Supplemental Security Disability benefits during some part of the tax year).
  3. You live alone and your annual income is less than $12,490 or your household combined income is less than $16,910.
  4. You’ve owned the house for at least three years or if you haven’t, you must have been a South Dakota resident for at least five years.

It’s important to keep in mind that you cannot receive both the sales and property tax refunds. So, the state will refund whichever is greater.

Note: When applying for the property tax refund, you will need to include a copy of your annual real estate tax notice.

Assessment Freeze for the Elderly & Disabled

An assessment freeze is available for eldery and disabled South Dakotans. If you qualify for an assessment freeze, you will see a reduction in the assessed value of the property which will lower your tax bill.

Property Tax Reduction for Paraplegics

Paraplegic homeowners or their unremarried widow(er) can qualify for a reduction on their property taxes. This reduction will be based on your income using a graduated scale. To apply for the property tax reduction, complete Form PT-46B.

For help with understanding property taxes and potential relief, speak with one of our experienced tax professionals.

We offer professional help with property taxes
South Dakota Inheritance and Estate Taxes

Like most states nowadays, South Dakota doesn’t have an estate tax. This means that if you leave behind an estate, you can enjoy the peace of mind that only federal taxes will be applied to your estate and your heirs will receive a large portion of the intended gift.

South Dakota doesn’t have an inheritance tax either. This means that once you’ve inherited the money or assets, you won’t have to pay state taxes on it. However, you’ll still be taxed by the federal government.

Note: If your loved one deceased prior to July 1, 2001, and you haven’t yet paid taxes on your inheritance, you might owe back taxes on it. If this is the case, fill out a South Dakota Estate Tax Form.

South Dakota State Tax Credits

Tax credits can be directly subtracted from how much you owe on your tax bill. Since South Dakota does not have an income tax, there are no tax credits available for your individual income taxes.

Note: There are some credits available for certain businesses such as the Partners in Education Tax Program.

South Dakota State Tax Exemptions and Deductions

Exemptions and deductions are incentives that can lower your tax bill. South Dakota doesn’t offer any tax deductions because this tax incentive is designed to reduce your taxable income. However, there are several exemptions you can take advantage of when it comes to your property tax bill:

  • Property Tax Homestead Exemption: This exemption works more like a deferral. Payment on property taxes is delayed until the property is sold, where it will become due and must be paid to transfer ownership of the property. To apply for this exemption, you must be at least 70 years old. If you believe you qualify, complete Form PT-38C.
  • Property Tax Exemption for Disabled Veterans: Veterans who are permanently and 100% disabled, or their surviving spouses who haven’t remarried, can apply for a property tax exemption of up to $150,000 of the assessed value of the property. To apply for this exemption, complete Form PT-46C.
  • Property Tax Exemption for Paraplegic Veterans: If you are a paraplegic veteran, a veteran who has lost the use of both lower extremities, or their unremarried widow(er), you may qualify for this property tax exemption that absolves you from all property taxes. To apply for this exemption, complete Form PT-46A.

Not sure if you qualify for any exemptions? We can help you navigate the requirements and applications.

Discover more deductions — speak to a tax pro today!
Calculating Your South Dakota Tax Refund

When calculating your South Dakota taxes, there are a few tax tips you should keep in mind:

  • Read through our helpful South Dakota tax guide (looks like you already checked this off the list!)
  • Figure out which taxes apply to you (for example, if you don’t own property, you don’t have to worry about paying any property taxes)
  • Decide whether you’re going to complete your taxes yourself (if so use our tax calculator to help you get an idea of what you might owe) or you’re going to work with one of our tax professionals
  • If you complete your own taxes, make sure you review all your calculations to ensure they are correct (even small mistakes could lead to tax penalties if you end up underpaying)
  • Make sure you hold onto your tax documents (they will come in handy if you find yourself facing an audit)

Still have questions about calculating your taxes? Speak with one of our tax experts today for help!

How to Pay South Dakota Taxes

Make sure you pay your taxes on time. The first payment for your property taxes are due by April 30th and the second half is due October 31st. Failing to pay by these dates is likely to result in penalties. And, after these dates, you're considered delinquent on your taxes.

The penalty for late property tax payments is 10%.You can also pay your property taxes early if you life, but there is no discount awarded for early payments.

Businesses are responsible for collecting and paying sales taxes, which is why they’re charged at the time of purchase. At the end of the day, they will be the ones submitting the required tax forms which are due by the 20th of the month after they’re collected.

Fallen behind on state taxes? Get help with tax resolution today!
South Dakota Tax Facts

Now that we’ve covered the basics, here are a few tax fun facts you should know about as a South Dakota taxpayer:

Summary of Federal Taxes

While your South Dakota taxes might be fairly straightforward, federal taxes are often more complex because you do have to worry about paying taxes on your income. Make sure you take your time when researching and completing taxes, it’s easy to mix up the varying tax rates.

Keep in mind that the filing status you select on your federal taxes will need to be used on your South Dakota state taxes.

Note: Your federal taxes are due earlier than your state taxes. Make sure you have your federal tax return submitted and your first payment made by April 15th (if it’s on the weekend, they’ll be due the following business day).

Call us to stress less and save more on your federal tax refund.
Summary of Federal Taxes
Remember that South Dakota state taxes are separate from federal state taxes, and that the South Dakota tax brackets are different at a state level.
Tax Considerations

This information is accurate as of 2019. Special circumstances that can affect your tax return may apply.

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